Welcome to my grand opening. Let’s dive right in.
I would like to point something out that I hope is helpful to you in this election year. With all the political character assassination flying around, it’s important to remember that we can and should critique more about our government than candidates for office. We tend to subject ourselves to a dangerous sleight of hand when reflecting on the problems we face—we like to envision the causes of problems to extend no further than the individuals involved. When BP spilled all of that oil in the gulf, we were talking about how brazen their CEO was in his interactions with the press, but we weren’t talking about an arrangement in which dangerous and experimental drilling operations can exist just offshore without significant prior environmental impact research or oversight. The recent shooting in Colorado, like any in the USA, didn’t incite a meaningful debate about why the procedure of buying an assault rifle is much like buying a gallon of milk. We opted to focus on the shooter’s spooky and foreboding personality. After the stock market crashed in 2008 and resulted in the evaporation of 40% of Americans’ net worth, talk has been about the greed and entitledness of bankers. Rarely do we talk about how Wall Street transformed in the years leading up to the crash as its relationship with the government changed, and whether there is a relevant conflict of interest among lawmakers due to revolving door careers, lobbying, and campaign finance. The common thread in all these cases is the wholeness of the event evading the bloodhounds of inquiry, which are busy devouring a decoy idea that they could smell a mile away. It is easier to critique people because we have an easier time understanding them than we do the structure of a society. If this is the extent of our discussion, though, then we ignore the power we have to understand and solve important problems. We can blame establishment media if we want. But we all have Google.
A nice example of this phenomenon is the Oscar-winning and informative documentary Inside Job, which examines the crash of 2008. Nice not because it is a perfectly-embodied instance of this phenomenon, but because it reveals how indulging in the temptation to confine blame to people can derail meaningful discussion about a problem’s causes. The film chronicles the deregulation of the financial services industry and argues for a causal connection between deregulation and the crash. Inside Job offers a useful time line of the events that culminated in the crash, but its argument could be more ambitious and is only partially fleshed out. This is probably because the film is preoccupied with prodding us to unleash a bewildered hatred on Wall Street executives themselves. While explaining the series of events that led to the crash, Inside Job repeatedly pulls the audience out of reflection upon those events to advance its true message. Dollar figures of huge executive pay float above unflattering pictures of executives set to a scary soundtrack. The audience is pelted with the cost of executives’ private jets and the posh real estate that they own. One segment of the film is devoted entirely to showing us that the Wall Street ranks are rife with cocaine abuse, adultery, and the use of prostitutes. It even trots in an MIT scientist to tell us that cocaine stimulates the same part of the brain that the thought of money does—whatever that means.
Inside Job‘s purpose is to show us that bankers caused the crash with irresponsibility and illegality. If that is its purpose, then proof or evidence of the likelihood of broken laws would have been helpful. Wondering if anything illegal happened in the financial services industry leading up to the crash is much like wondering if anyone can smell your really bad fart on a plane. Even so, specific arguments for criminal activity would help corral our inquiry within the area of purposefulness, and would prevent us from straying onto the path of mere howling beasts starving for Hamptons tanned banker flesh. Inside Job won the Oscar for best documentary, and Charles Ferguson, its director, echoed its chest-pounding conclusion in his acceptance speech:
“I must start by pointing out that three years after a horrific financial crisis caused by massive fraud, not a single financial executive has gone to jail, and that’s wrong.”
It is important to note that the film’s conclusion is right, that its director is not blind to the bigger picture of the crash, and can tell you exactly what laws he thinks Wall Street broke. Still, for your consideration, I offer you the widely acclaimed film itself as an example of crucial points missed when confining an inquiry of causes to individuals. Certainly, criminal prosecution of the firms involved must go as far as the evidence will take them. But I don’t say that because I share Inside Job‘s drunken thirst for bankers’ blood.
Prosecuting banks is necessary not because bankers are rich and evil and must pay, but because it is part of an answer to a sober set of questions that tries to address the disaster’s real causes: What can we learn from the crash? In what ways, if any, did the deregulation of Wall Street cause the crash? Did deregulation trigger the artificially wider availability of credit, predatory lending, housing bubble, and ensuing crash? Was this deregulation motivated purely by the best interest of the American people? If not, what other motivations were present among lawmakers? Given the public backlash against bankers as a result of the crash, why has the White House shielded Wall Street from prosecution, despite Obama’s criticism of those “fat cat bankers?” What effects do campaign contributions, lobbying, and the prospect of high-paying jobs in the private sector have on government officials while in office, and are they dangerous or harmless? What about the SEC—the regulators whose job it is to enforce the law on Wall Street? Are we feeling the effects of a conflict of interest in the SEC, given that they often end up working for the firms they regulate where they make much higher salaries? Is this evidenced by the recent firing of an SEC lawyer for trying to investigate a former CEO of Morgan Stanley on suspicion of insider trading?
If we resist the temptation to confine our criticism to a deviant out-crowd that we have no control over, then all sorts of other interesting questions seem ripe for answerin’. They are questions about things we can control as citizens of a democracy. It allows us to keep our eyes on the prize—identifying root causes of problems and figuring out how to transform our government into one that doesn’t let us down. If we approach the 2008 crash like this, then the need to prosecute Wall Street eventually emerges as part of a remedy that at least attempts to wholly address the problem at hand: If we don’t prosecute Wall Street, then, among other travesties, we will have missed an opportunity to create a motivating reason for the industry not to engage in the kinds of fraud that they almost certainly engaged in, and that rained economic hardship on all of us. Our tunnel vision of the evil bank executive decoy idea has maintained the vulnerabilities of our world to a similar catastrophe—a world where everyone just hates bankers for one reason or another.
We make this mistake because it is an easy way out of thinking hard, reading, and talking with each other about complicated problems. After the shootings in Colorado, we all found on our doorsteps a neatly wrapped package with a perfect bow and a card that said: “An explanation of this confusing, painful disaster in one thought. Guaranteed!” With a sigh of relief, we opened the package and found the idea of a crazy loner named James Holmes, seemingly precisely identifying the problem’s cause and leaving not much else to consider, and our curiosity about the states of assault weapon availability and our understanding of mental illness in the USA magically disappeared. The same inviting package was delivered to Germans after WWI as they felt the pain of their own Great Depression, that time containing the fabricated, tragic decoy idea of the greedy and parasitic Jew. There seem to be a lot of these packages in circulation today. Consider hanging a sign on your door that says something like: “Return all neatly wrapped packages to sender. I am still thinking and talking with fellow humans.”